Question

1. Issued 10,000 shares of common stock for $15,000 cash.2. Purchased land for $12,000, signing a note payable for the full amount.3. Purchased office equipment for $1,200 cash.4. Received cash of $14,000 for services provided to customers during the month.5. Purchased $300 of office supplies on account.6. Paid employees $10,000 for their first month's salaries.What was the total amount of ATI's liabilities followingthese six transactions?A. $12,300.B. $27,300.C. $22,600.D. $15,500.

Answer 1

Answer: Option(A) is correct.

Step-by-step explanation:

Given that,

Total amount of ATI's liabilities = Purchased land by signing a note payable + Purchased office supplies on account

= $12,000 + $300

= $12,300

All other transactions are done in terms of cash.

(1) Positive cash balance of $15,000.

(3) Negative cash balance of ($1,200)

(4) Positive cash balance of $14,000.

(6) Negative cash balance of ($10,000)

Whereas transactions (2) and (5) created liability for the ATI.